Dow Joneshttp://www.businessinsider.com/category/dow-jones
en-usTue, 31 Mar 2015 16:56:39 -0400Tue, 31 Mar 2015 16:56:39 -0400The latest news on Dow Jones from Business Insiderhttp://static3.businessinsider.com/assets/images/bilogo-250x36-wide-rev.pngBusiness Insiderhttp://www.businessinsider.com
http://www.businessinsider.com/apple-joins-the-dow-2015-3Here's why Apple joining the Dow is a 'historic moment' for the company (AAPL)http://www.businessinsider.com/apple-joins-the-dow-2015-3
Fri, 06 Mar 2015 10:43:00 -0500Myles Udland
<p><img style="float:right;" src="http://static3.businessinsider.com/image/54f9c2e7eab8eac1087dc2c3-1200-924/iphone-6-lines-6.jpg" border="0" alt="iPhone 6 lines"></p><p>Apple is <a href="http://www.businessinsider.com/apple-is-joining-the-dow-2015-3">joining the Dow</a>.&nbsp;</p>
<p><span>And this news for Apple was a long time coming.&nbsp;</span></p>
<p>On March 19, the world's largest company will join the world's most famous stock index, replacing AT&amp;T.</p>
<p>Back in June, <a href="http://www.businessinsider.com/apple-stock-split-2014-4">Apple effected a 7:1 stock split</a>, meaning that every one share of Apple became seven shares, taking the stock price from about $700 to about $100. As of Friday, Apple shares were trading at about $128, just below their split-adjusted all-time high of $132.</p>
<p>When Apple announced its stock split back in April, <a href="http://www.bloomberg.com/news/articles/2014-04-23/apple-stock-split-removes-obstacle-to-inclusion-in-dow">reports indicated</a>&nbsp;that the company's soon-to-be-reduced share price could open the door for the company to join the Dow.&nbsp;</p>
<p><span>And now here we are.</span></p>
<p>The high price tag had kept Apple out of the Dow because the index is weighted by price, not by market cap, meaning that more expensive stocks, on a per-share basis, get a larger weighting and have a larger impact on changes in the index's price.&nbsp;</p>
<p>So price was a big reason S&amp;P couldn't add Apple to the Dow.</p>
<p><span style="line-height: 1.5em;">But there are also real reasons Apple would want to be in the Dow.&nbsp;</span></p>
<p>Stocks in the Dow have more visibility. The Dow, for all of its flaws, is the stock index that most people think of when they think of the "stock market."&nbsp;</p>
<p>Joining the Dow also opens up Apple to a new class of investor. All Dow members pay dividends, which gives investors at least some sort of regular cash return aside from the share price, and many income-focused funds and strategies will focus on buying Dow members.&nbsp;</p>
<p><img src="http://static3.businessinsider.com/image/54cac4876bb3f7e764d381a4-1200-800/169188469-1.jpg" border="0" alt="Tim Cook"></p>
<p>Additionally, numerous investing strategies — like <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0CB8QFjAA&amp;url=http%3A%2F%2Fwww.dogsofthedow.com%2F&amp;ei=kMT5VI63NqzdsATy_YLIDw&amp;usg=AFQjCNFfORSWvKbXBctnD7WYZIVDhKx6_w&amp;bvm=bv.87611401,d.cWc">Dogs of the Dow</a> — are centered on investing in the index. Apple will also now be added to ETFs that include the Dow, leading to a potentially wider ownership.&nbsp;</p>
<p><span>According to Dow Jones,&nbsp;</span><span></span><strong>"a stock typically is added only if the company has an excellent reputation,&nbsp;demonstrates sustained growth, and is of interest to a large number of investors," </strong>a<span style="line-height: 1.5em;">nd so on some level, Dow Jones is reaffirming Apple's corporate reputation with this addition.</span></p>
<p>Following Friday's announcement, Piper Jaffray analyst Gene Munster told Bloomberg Radio that Apple's inclusion was a "historic moment."</p>
<p>It also just makes sense:&nbsp;<span>Apple's market cap is over $750 billion, making it about twice as big as the next-largest publicly traded company in the US, Exxon Mobil Corp. And with $178 billion in cash on its balance sheet, Apple's cash hoard is larger than the market cap of AT&amp;T ($175 billion), the company it is replacing in the Dow.&nbsp;</span></p>
<p><span><span>Apple's addition will also be effective at the same time that Visa — another Dow member — will effect a 4:1 stock split, meaning Visa shares will fall from about $275 to about $69 per share as every one Visa share becomes four Visa shares with one-fourth the price.&nbsp;</span></span></p>
<p>But <a href="http://www.streetinsider.com/Analyst+Comments/Apple+%28AAPL%29+Joining+Dow+is+Bad+-+Analyst/10348145.html">according to StreetInsider</a>, some analysts are less than thrilled with the news, with&nbsp;Trip Chowdhry of Global Equities Research saying the Dow is for losing companies, not innovative companies like Apple.&nbsp;</p>
<p>Apple's <a href="http://www.businessinsider.com/apple-event-march-9-2015-2">next big announcement</a> is set for next Monday, when we expect to see Apple Watch for the first time.&nbsp;</p><p><a href="http://www.businessinsider.com/apple-joins-the-dow-2015-3#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/iphone-headphones-tricks-2015-2">14 things you didn't know your iPhone headphones could do</a></p> http://www.businessinsider.com/why-sp-added-apple-to-dow-2015-3Here's how they decide who gets to join the Dow (DJI, AAPL)http://www.businessinsider.com/why-sp-added-apple-to-dow-2015-3
Fri, 06 Mar 2015 10:35:00 -0500Akin Oyedele
<p><a href="http://www.businessinsider.com/apple-is-joining-the-dow-2015-3"><img style="float:right;" src="http://static1.businessinsider.com/image/54f9c8ea69bedd975f0b264c-751-563/apple-bite-2.png" alt="apple bite" border="0">Apple will replace AT&amp;T on the Dow Jones Industrial index</a><span style="line-height: 1.5em;"> on March 19.</span></p>
<p>The index has 30 of the largest public companies in the US.</p>
<p>Via the S&amp;P Dow Jones Indices <a href="http://www.djindexes.com/mdsidx/downloads/meth_info/Dow_Jones_Averages_Methodology.pdf">website</a>, here's the eligibility criteria:</p>
<p style="padding-left: 30px;">"While stock selection is not governed by&nbsp;quantitative rules, a stock typically is added&nbsp;only if the company has an <strong>excellent&nbsp;reputation</strong>, demonstrates <strong>sustained growth</strong> and&nbsp;is <strong>of interest to a large number of investors</strong>.&nbsp;Maintaining adequate sector representation&nbsp;within the index is also a consideration in the&nbsp;selection process for the Dow Jones Industrial&nbsp;Average™. Companies should be<strong>&nbsp;incorporated and headquartered in the U.S</strong>. In&nbsp;addition, <strong>a plurality of revenues should be&nbsp;derived from the U.S.</strong>"</p>
<p>The most valuable company in the world, with a market cap of around $750 billion, clearly checks all these boxes.&nbsp;</p>
<p><span>David M. Blitzer, Managing Director and Chairman of the Index Committee at S&amp;P Dow Jones Indices, said in Friday's press release: "</span>As the largest corporation in the world and a leader in technology, Apple is the clear choice for the Dow Jones Industrial Average, the most recognized stock market measure."&nbsp;</p>
<p>Congrats, Apple!</p><p><a href="http://www.businessinsider.com/why-sp-added-apple-to-dow-2015-3#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/apple-is-joining-the-dow-2015-3Apple is joining the Dow (AAPL, T)http://www.businessinsider.com/apple-is-joining-the-dow-2015-3
Fri, 06 Mar 2015 09:02:00 -0500Steve Kovach
<p><img style="float:right;" src="http://static4.businessinsider.com/image/54f9b4816bb3f7ba390b2644-1200-924/apple-ceo-tim-cook-51.jpg" border="0" alt="Apple CEO Tim Cook"></p><p>Apple is joining the Dow effective March 19.</p>
<p>Apple will replace AT&amp;T in the Dow Jones Industrial Average.</p>
<p>Apple is the most valuable company in the world, with a market cap of about $736 billion.</p>
<p>The company split its stock 7:1 in June. It has been trading at all-time highs in recent weeks.</p>
<p>Piper Jaffray analyst Gene Munster called Apple's inclusion in the Dow a "historic moment."</p>
<p>Here's the press release from Dow Jones:</p>
<p style="padding-left: 30px;">Apple Inc. (NASD:AAPL) will replace AT&amp;T Inc. (NYSE:T) in the&nbsp;<span style="line-height: 1.5em;">Dow Jones Industrial Average (DJIA) after the close of trading on Wednesday, March 18. The&nbsp;</span><span style="line-height: 1.5em;">change will be effective with the opening of trading on Thursday, March 19. </span></p>
<p style="padding-left: 30px;"><span style="line-height: 1.5em;">The index change was&nbsp;</span><span style="line-height: 1.5em;">prompted by Visa Inc.’s (NYSE:V) 4:1 stock split which is scheduled to be effective at the same&nbsp;</span><span style="line-height: 1.5em;">time. The post-split adjusted lower price of Visa will reduce the weighting of the Information&nbsp;</span><span style="line-height: 1.5em;">Technology sector in the index. Adding Apple to the index will help to partially offset this reduction.&nbsp;</span><span style="line-height: 1.5em;">In price weighted indices such as the DJIA, a large change in price of a high priced stock can have&nbsp;</span><span style="line-height: 1.5em;">a material impact on sector representation in the index and this index change is designed to&nbsp;</span><span style="line-height: 1.5em;">minimize that impact. The Telecommunication Services sector will continue to be represented in the&nbsp;</span><span style="line-height: 1.5em;">DJIA by Verizon Communications Inc. (NYSE:VZ).</span></p>
<p style="padding-left: 30px;">“As the largest corporation in the world and a leader in technology, Apple is the clear choice for the&nbsp;<span style="line-height: 1.5em;">Dow Jones Industrial Average, the most recognized stock market measure,” says David M. Blitzer,&nbsp;</span><span style="line-height: 1.5em;">Managing Director and Chairman of the Index Committee at S&amp;P Dow Jones Indices. “The DJIA is&nbsp;</span><span style="line-height: 1.5em;">price weighted so extremely high stock prices tend to distort the index while very low stock prices&nbsp;</span><span style="line-height: 1.5em;">have little impact. The timing of Apple’s addition to the DJIA hinged on two stock splits: Apple’s 7:1&nbsp;</span><span style="line-height: 1.5em;">last June and Visa’s 4:1 on March 19th this year. Apple’s split brought the stock price down closer&nbsp;</span><span style="line-height: 1.5em;">to the median price in the DJIA. The Visa split will reduce the technology weight in the DJIA and&nbsp;</span><span style="line-height: 1.5em;">make room for Apple. Among the current DJIA constituents, AT&amp;T has one of the lowest prices.&nbsp;</span><span style="line-height: 1.5em;">Moreover, the DJIA is over-weighted in telecommunications and AT&amp;T and Verizon are quite&nbsp;</span><span style="line-height: 1.5em;">similar, though AT&amp;T has a smaller market capitalization.”</span></p>
<p style="padding-left: 30px;">Apple, headquartered in Cupertino, CA, designs, manufactures, and markets mobile communication&nbsp;<span style="line-height: 1.5em;">and media devices, personal computers, and portable digital music players.&nbsp;</span><span style="line-height: 1.5em;">The change won’t cause any disruption in the level of the index. The divisor used to calculate the&nbsp;</span><span style="line-height: 1.5em;">index from the components’ prices on their respective home exchanges will be changed prior to the&nbsp;</span><span style="line-height: 1.5em;">opening on March 19. This procedure prevents any distortion in the index’s reflection of the portion&nbsp;</span><span style="line-height: 1.5em;">of the U.S. stock market it is designed to measure.</span></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/samsung-rise-and-fall-2015-2" >How Samsung won and then lost the smartphone war</a></strong></p>
<p><a href="http://www.businessinsider.com/apple-is-joining-the-dow-2015-3#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/samsung-galaxy-s-6-video-review-2015-3">Why Samsung's most gorgeous Galaxy phones yet will leave you with mixed feelings</a></p> http://www.businessinsider.com/r-what-would-the-dow-look-like-if-it-included-apple-2015-3If Apple were in the Dow...http://www.businessinsider.com/r-what-would-the-dow-look-like-if-it-included-apple-2015-3
Mon, 02 Mar 2015 10:50:00 -0500Rodrigo Campos and Chuck Mikolajczak
<p><img style="float:right;" src="http://static1.businessinsider.com/image/53d295865afbd3e9598b4569-450-300/hedge-fund-greenlight-details-short-bets-still-likes-apple.jpg" alt="The Apple logo is pictured inside the newly opened Omotesando Apple store at a shopping district in Tokyo June 26, 2014. Picture taken June 26. REUTERS/Yuya Shino " border="0"></p><p>NEW YORK (Reuters) - It may be by far the most valuable American company but Apple Inc &lt;aapl.o&gt; still can’t get into at least one exclusive club – the 30-member Dow Jones Industrial Average.</p>
<p>That may not be a problem for the company behind the iPhone and the iPad, after all Apple shares recently hit record highs. It is, though, hurting those who tie their investments to the performance of the venerable Dow, which was first calculated in 1896 and is still probably the best-known stock index in the world.</p>
<p>Since Apple split its shares seven-for-one last June 6, it’s delivered investors a gain of more than 43&nbsp;percent including dividend payments, and that has contributed almost one third of the Nasdaq 100’s &lt;.NDX&gt; return of 18.6&nbsp;percent, according to ETF.com. By comparison, the Dow’s total return has been only 8.97 percent over that period, and it has also underperformed the S&amp;P500 – which does include Apple – and has a 9.56 percent return.&nbsp;</p>
<p>Had Apple been substituted for 29 of the 30 Dow components last June, the index would have been higher. The only Dow member that would have had more of a positive influence on the index than Apple is Visa &lt;v.n&gt;. If Apple had replaced a badly lagging stock such as IBM &lt;ibm.n&gt;, which has dropped more than 13&nbsp;percent since Apple’s split, the Dow would now be about 450&nbsp;points higher than its Friday close at 18132.70 (and have gained 9.8 percent&nbsp;rather than the 7.1 percent increase it has recorded, without dividends).</p>
<p>For an interactive graphic on how if Apple had been substituted for almost all of the Dow's 30 components, the index would be higher, click here: http://reut.rs/1DK9ra0</p>
<p><img class="float_left" src="http://static1.businessinsider.com/image/54f4865e69bedd0b2ce84a68-793-650/screen shot 2015-03-02 at 10.47.54 am.png" alt="apple dow" border="0"></p>
<h3>INDEX CHANGES RARE</h3>
<p>So why can’t a company that so dominates the consumer and technology worlds, and whose share price has climbed an astounding split-adjusted 3,500 percent since January 2000, get into an index that has gained just 55 percent in that period.</p>
<p>S&amp;P Dow Jones Indices, a unit of McGraw Hill Financial Inc &lt;mhfi.n&gt;,&nbsp;rarely makes changes to the index it owns, and often only when forced to by a major corporate event, such as an acquisition&nbsp;of a component.</p>
<p>The last change was in September&nbsp;2013, when Alcoa &lt;aa.n&gt;, Hewlett-Packard &lt;hpq.n&gt; and Bank of America &lt;bac.n&gt; were replaced by Visa, Nike &lt;nke.n&gt; and Goldman Sachs &lt;gs.n&gt; in one of the biggest shake-ups in the index for some years.&nbsp; That decision was triggered by the low stock prices of the three companies that were removed and by a desire to diversify the industry groups in the index, according to a statement from S&amp;P Dow Jones Indices at the time.</p>
<p>“S&amp;P doesn't comment on any pending index changes with respect to any specific companies," said David Blitzer, managing director and chairman of the index committee at S&amp;P Indices in New York. </p>
<h3>SUSTAINED GROWTH</h3>
<p>According to S&amp;P Dow Jones Indices' guidelines on its website, a stock "typically is added to the index only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors." Apple would certainly qualify on those criteria.</p>
<p>In addition, S&amp;P Dow Indices says that "adequate sector representation within the indices is also a consideration in the selection process."</p>
<p>As of the end of January, 9.47 percent of the Dow was allocated to the technology sector, placing it fifth among the nine sectors that comprise the index. Given that technology makes up 19.9 percent of the broader S&amp;P 500, that should also help Apple’s case. And given Apple has also more than earned its stripes as a consumer and media company it clearly has other claims on membership.</p>
<p>Before June last year, it would have been much more difficult to add Apple because pre-split, the stock was trading at such a high price – it reached $705 back in 2012. The Dow is a price weighted index, which means a stock with a higher price has a greater influence on the index. By contrast, the S&amp;P and Nasdaq indexes are weighted by market capitalization.</p>
<p>Many investors who tie their investments to a broad index will use the S&amp;P 500 ($1.9 trillion of index funds) or the Nasdaq 100. But some do buy the Dow through vehicles such as the SPDR Dow Jones Industrial Average ETF , which has a market value of about $12.32 billion and is known as the Dow Diamonds. There are also leveraged funds that seek to double or even triple its gains, such as the ProShares UltraPro Dow30 &lt;udow.k&gt;.&nbsp;&nbsp;&nbsp;</p>
<p>Followers of the Dow have to get used to some odd influences because of its structure. For example, a 1 percent move in an index member like Visa with a share price of $271.30 has more than 10 times the impact of a similar change in a fellow Dow member such as General Electric Co &lt;ge.n&gt;, with a stock price at $25.99.</p>
<p>Visa has risen 28 percent since the June split, lagging Apple, and has less than a quarter of Apple’s&nbsp; market value. However, it still contributed more to the index gains than Apple would have in its place because Visa’s shares are priced so high. That will change on March 18 when Visa itself does a four-for-one stock split.</p>
<p>And the shares of two Dow components have just about matched Apple’s performance since last June with gains of about 42 percent each before dividends. But the impact of the two, Home Depot &lt;hd.n&gt; and UnitedHealth Group Inc &lt;unh.n&gt;, on the index is less than if they were replaced with Apple, this time because Apple’s $128.46 closing share price on Friday is a bit higher than theirs. &nbsp;&nbsp;&nbsp;</p>
<p>&nbsp;</p>
<p>(Reporting by Rodrigo Campos, Chuck Mikolajczak; With additional reporting by Caroline Valetkevitch and Ashley Lau; Editing by Linda Stern and Martin Howell)</p><p><a href="http://www.businessinsider.com/r-what-would-the-dow-look-like-if-it-included-apple-2015-3#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/iphone-headphones-tricks-2015-2">14 things you didn't know your iPhone headphones could do</a></p> http://www.businessinsider.com/dow-on-pace-for-best-month-since-october-2011-2015-2Quietly, the Dow is on pace for its best month since 2011 (DIA)http://www.businessinsider.com/dow-on-pace-for-best-month-since-october-2011-2015-2
Wed, 25 Feb 2015 13:30:34 -0500Myles Udland
<p><img style="float:right;" src="http://static1.businessinsider.com/image/54ee137aecad04947603c98e-514-385/usain-bolt-quiets-crowd-2.jpg" border="0" alt="usain bolt quiets crowd"></p><p>Quietly, February has been a great month for stocks.&nbsp;</p>
<p>And right now, the Dow is on pace for its best month since October 2011.&nbsp;</p>
<p>In an afternoon email, the NYSE's Rich Barry pointed out that as it stands, the Dow is up more than 1,000 points — or better than 6% — so far this month to a new record high above 18,200.&nbsp;</p>
<p>As Barry wrote: "<span>On February 2nd, the Dow opened at 17,169.99, and at its last plus-tick the index stood at 18,222.11. You guys do the math, but I'm pretty sure it's 1,000+ points to the upside."</span></p>
<p>If this gain holds, February would be just the third month in history that the blue chip index gained more than 1,000 points. And t<span style="line-height: 1.5em;">he last time the Dow gained more than 1,000 points in a month?&nbsp;</span></p>
<p>October 2011.&nbsp;</p>
<p>And so during a month in which markets were fixated on oil, Greece, and the Fed, US stocks have powered higher.&nbsp;</p>
<p>Not bad.&nbsp;</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/when-the-fed-raises-rates-stocks-flat-2015-2" >When the Fed finally raises rates, stocks will go nowhere</a></strong></p>
<p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/bi-most-important-charts-in-the-world-2015-2" >The most important charts in the world</a></strong></p>
<p><a href="http://www.businessinsider.com/dow-on-pace-for-best-month-since-october-2011-2015-2#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/microsoft-caterpillar-utx-weighing-on-dow-2015-14 Stocks Have Hacked 100 Points Off The Dow (MSFT, CAT, UTX, PG, DIA)http://www.businessinsider.com/microsoft-caterpillar-utx-weighing-on-dow-2015-1
Tue, 27 Jan 2015 09:50:00 -0500Sam Ro
<p><img style="float:right;" src="http://static5.businessinsider.com/image/525fcff569bedd0d61aaec45-694-521/ice-girl-chainsaw-2.jpg" alt="ice girl chainsaw" border="0"></p><p>US markets are <a href="http://www.businessinsider.com/us-market-update-january-27-2015-1">getting slammed right now</a>.</p>
<p>The Dow is down by a whopping 271 points.</p>
<p>The 30-component Dow Jones Industrial Average is a peculiar stock-market index for several reasons.</p>
<p>For one, it's a price-weighted index, which means a stock with a high per-share price will have a greater influence on the index's fluctuations. Currently, a one-point move in any single Dow stock <a href="http://wsj.com/mdc/public/page/2_3022-djiahourly.html">moves the Dow by 6.42195 points</a>.</p>
<p>Four stocks are tumbling after releasing quarterly earnings and guidance that fell short of expectations: Microsoft, Caterpillar, Procter &amp; Gamble, and United Technologies.</p>
<ul>
<li>Microsoft is down 4.7 points (-10.1%), which shaves 30.1 points from the Dow.</li>
<li>CAT is down 6.7 points (-7.8%), which hacks 43.0 points.</li>
<li>United Technologies is down 1.6 points (1.3%), which cuts 10.2 points.</li>
<li>P&amp;G is down by 2.6 points (2.9%), which takes 16.6 points.</li>
</ul>
<p>Altogether, that's 99.9 points.</p>
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<p class="embed-spacer"></p><p><a href="http://www.businessinsider.com/microsoft-caterpillar-utx-weighing-on-dow-2015-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/rosenberg-volatility-in-bull-markets-2015-1ROSENBERG: Remember, The Dow Fell 9,956 Points Last Yearhttp://www.businessinsider.com/rosenberg-volatility-in-bull-markets-2015-1
Thu, 15 Jan 2015 12:31:00 -0500Andy Kiersz
<p><img style="float:right;" src="http://static4.businessinsider.com/image/52af26ebecad049a7f6ee2dd-1200-924/david-rosenberg-15.png" border="0" alt="David Rosenberg"></p><p>So far, 2015 hasn't been particularly kind to the stock market, with <a href="http://www.businessinsider.com/us-market-update-january-15-2015-1">markets down Thursday morning</a> after four straight trading days closing in the red.</p>
<p>Despite this, it's important for long-term investors not to panic.</p>
<p>As David Rosenberg says, <a href="http://www.businessinsider.com/rosenberg-avoiding-overreaction-2014-10">timing the market is less important than time in the market</a>.</p>
<p>In his morning note, Gluskin Sheff's Rosenberg argues for calm, pointing out that volatility and turbulence happen in every bull market.</p>
<p><span style="font-size: 15px; line-height: 1.5em;">He broke down the volatile nature of markets, even bull markets, in an interesting way. </span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">"In 2014, the Dow amassed 9,956 down points on the down days and 11,202 up points cumulatively on the winning sessions," he noted.</span></p>
<p>So while we saw an overall year-over-year gain of 1,246 points in the Dow in 2014, it was a bumpy ride to get there.</p>
<p>Looking back even further, Rosenberg pointed out that over the course of the last six years since the market bottomed, the Dow's cumulative losses on the down days added up to 55,962 points, while the gains on the up days totaled 67,029 points. Combine those together and you have a huge overall gain, but there were a lot of ups and downs on the path to that gain.</p>
<p>Rosenberg observed that 2014 started out similarly to what we've seen over the last two weeks, but that markets ended up showing huge gains by the end of the year.</p>
<p><span>"The equity market slid 4% last January and by mid-February had corrected 6% — and yet, by the end of 2014, the S&amp;P 500 managed to generate a full-year total return of 14%," he said.</span></p>
<p>Even in a healthy bull market, there will be up days and down days. It's important not to freak out too much on the down days, and to keep a steady hand on the wheel. </p>
<p><span style="font-size: 15px; line-height: 1.5em;">"Again," Rosenberg says, "what matters is time in the market, not timing the market."</span></p>
<p><span style="font-size: 15px; line-height: 1.5em;"> </span></p>
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<p><strong> </strong></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/morgan-stanley-stock-overlay-chart-2015-1" >No, You Didn't, Morgan Stanley!</a></strong></p>
<p><a href="http://www.businessinsider.com/rosenberg-volatility-in-bull-markets-2015-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/r-giving-thanks-for-big-stock-gains-2014-11The Market Has Been Soaring Lately — And Some People Are Terrifiedhttp://www.businessinsider.com/r-giving-thanks-for-big-stock-gains-2014-11
Fri, 21 Nov 2014 23:38:00 -0500Ryan Vlastelica
<p><img style="float:right;" src="http://static4.businessinsider.com/image/542583245afbd3ba268b4567-450-300/bank-stocks-seen-as-cheap-still-attract-caution-2014-9.jpg" border="0" alt="A street sign is seen in front of the New York Stock Exchange on Wall Street in New York, February 10, 2009. REUTERS/Eric Thayer "></p><p><span style="font-size: 15px; line-height: 1.5em;">NEW YORK (Reuters) - U.S. stock investors head into the Thanksgiving holiday thankful for the market's recent strength, which puts major indexes on track for another year of double-digit gains, though the swiftness of the advance has raised eyebrows.</span></p>
<p>The S&amp;P 500 is up 13.3 percent from an intraday low hit on Oct. 15, and the gains since then have been broad. Since that bottom, all but 23 S&amp;P 500 components are higher.</p>
<p>The magnitude of the rally has some concerned. Several notable fund managers at this week's Reuters Investment Outlook Summit said they don't expect stocks to do much in 2015.</p>
<p>Citigroup on Thursday wrote that the market was "on the edge of euphoria ... causing us to be more cautious," while Goldman Sachs on Wednesday released its 2015 year-end target of 2,100 - just 1.8 percent above current levels.</p>
<p>The recent stretch of solid earnings and economic figures, however, leaves managers puzzled over what could hurt the market going forward.</p>
<p>"It's tough for me to wrap my head around the next big move being lower," said David Lebovitz, global market strategist at J.P. Morgan Funds in New York. "Some people aren't comfortable with current levels, but fundamentals remain strong."</p>
<p>The market's recent gains prompted a notable commentary from the Federal Reserve Bank of San Francisco on Nov. 13 that pointed out certain valuation metrics look stretched. It also noted that the ratio of NYSE margin debt to GDP in September stood at an elevated level that, in the past, was "followed by major downturns in stock prices."</p>
<p>Jim McDonald, chief investment strategist at Chicago-based Northern Trust Asset Management, wasn't buying it. He said the level of margin debt is "more or less consistent with the trend line over the past 20-plus years," though a pullback was possible.</p>
<p>"The primary issue facing the market is that we've gotten a year's return out of the S&amp;P in the past month," he said. "Investors are more than willing to take risk off the table after such a big run."</p>
<p>Volatility may pick up next week as many take off for Thanksgiving. Markets are closed on Thursday and will close early on Friday.</p>
<p>However, December has historically been the best month of the year for the S&amp;P, according to the Stock Trader's Almanac, averaging a rise of 1.7 percent.</p>
<p>Energy names have jumped sharply since the October low, which could make them liable to profit taking, especially going into the Organization of the Petroleum Exporting Countries' Nov. 27 meeting, when members will consider whether to cut output to shore up prices.</p>
<p>Chesapeake Energy, Newfield Exploration, CONSOL Energy and Marathon Petroleum Corp have all gained more than 20 percent since the market's October low.</p>
<p>&nbsp;</p>
<p>(Editing by Nick Zieminski)</p><p><a href="http://www.businessinsider.com/r-giving-thanks-for-big-stock-gains-2014-11#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/headline-magazine-cover-risk-nonsense-2014-10The Silliest Reason In History To Sell Your Stockshttp://www.businessinsider.com/headline-magazine-cover-risk-nonsense-2014-10
Mon, 20 Oct 2014 17:33:00 -0400Elena Holodny
<p class="p1"><img style="float:right;" src="http://static6.businessinsider.com/image/511059b6ecad040766000008-400-315/bw thumb.png" alt="dow headlines" border="0"></p><p>Barron's <a href="http://www.businessinsider.com/barrons-bullish-cover-2014-10">latest cover</a> is looking bullish — and for some that's a sign to sell.</p>
<p class="p1">Traders and investors routinely freak out over bullish headlines, convinced they're signs of bullishness going mainstream.</p>
<p class="p2">Barron's cover story features a similarly "scary" tale and also the bullish results of the biannual Big Money poll.</p>
<p class="p1">"It's going to take a lot more than the past month's 5%-plus sell off in the stocks for America's money managers to change their upbeat tune," writes Barron's Jack Willoughby.</p>
<p class="p1">"Based on their mean forecasts in the Big Money poll, the bulls see the Dow Jones industrials topping 18,360 by the middle of 2015, and the Standard &amp; Poors 500 index hitting 2173," Willoughby added.</p>
<p class="p1">While this may rattle some nerves,&nbsp;magazine cover risk is total nonsense,&nbsp;<span>as Josh Brown once&nbsp;</span><a href="http://www.thereformedbroker.com/2013/02/03/think-twice-before-fading-barrons-covers/"><span class="s1">noted</span></a>.</p>
<p class="p1">Magazine covers are just magazine covers — not economic indicators.</p>
<p class="p1">We decided to comb through the history of the Dow and the S&amp;P from the 1960s to today to see exactly what happened in the markets following bold headlines.</p>
<p class="p1">Take a look.</p>
<p class="p1"><em>(Many thanks to&nbsp;</em><a href="http://www.ritholtz.com/blog/"><span class="s1"><em>Barry Ritholtz</em></span></a><em>, <a href="http://www.ritholtz.com/blog/2012/04/seen-this-movie-before/">Invictus</a>, and </em><a href="http://www.thereformedbroker.com/2013/02/03/think-twice-before-fading-barrons-covers/"><span class="s1"><em>Josh Brown</em></span></a><em>&nbsp;for digging up some of the older headlines. Editor's Note: Former Business Insider writer Rob Wile contributed to the original version of this feature.)</em></p><h3>We've traced the first headline risk debunking to the May 31, 1963 issue of Time, which talked about a rising US economy.</h3>
<img src="http://static2.businessinsider.com/image/5110458b69beddab4100001f-400-300/weve-traced-the-first-headline-risk-debunking-to-the-may-31-1963-issue-of-time-which-talked-about-a-rising-us-economy.jpg" alt="" />
<br/><br/><h3>Sure, stocks declined for about two months after that. But then they went up for a good while.</h3>
<img src="http://static4.businessinsider.com/image/5110462aeab8eaaa4f000016-400-300/sure-stocks-declined-for-about-two-months-after-that-but-then-they-went-up-for-a-good-while.jpg" alt="" />
<br/><br/><h3>The Dow hit 1,000 for the first time in November 1972.</h3>
<img src="http://static6.businessinsider.com/image/51103a1f6bb3f79a1400000f-400-300/the-dow-hit-1000-for-the-first-time-in-november-1972.jpg" alt="" />
<br/><br/><a href="http://www.businessinsider.com/headline-magazine-cover-risk-nonsense-2014-10#it-would-take-nearly-two-decades-more-before-the-dow-ticked-2000-4">See the rest of the story at Business Insider</a> http://www.businessinsider.com/dow-average-negative-for-2014-2014-10The Dow Is Now In The Red For 2014http://www.businessinsider.com/dow-average-negative-for-2014-2014-10
Fri, 10 Oct 2014 16:39:00 -0400Sam Ro
<p>Friday's <a href="http://www.businessinsider.com/closing-bell-october-10-2014-10">115-point sell-off in the Dow Jones Industrial Average</a> sent the 30-stock index into the red for the year.</p>
<p>Closing at 16,544, the Dow is now below its Dec. 31, 2013 close of 16,576.</p>
<p>Some market-watchers think this is just a <a href="http://www.businessinsider.com/tom-lee-on-market-weakness-2014-10">brief blip in the 5-year old bull market</a>. Others warn this could be <a href="http://www.businessinsider.com/sp-500-closes-below-200-day-moving-avg-2014-10">the beginning of something much scarier</a>.</p>
<p>One thing's for sure: volatility is back in the markets.</p>
<p><img src="http://static4.businessinsider.com/image/5438423d6da8112e60a3eec8-1200-900/cotd-dow-negative.jpg" border="0" alt="cotd dow negative"></p><p><a href="http://www.businessinsider.com/dow-average-negative-for-2014-2014-10#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/sp-500-all-time-high-sept-18-2014-9S&P 500 ALL-TIME HIGH (SPY, DIA, QQQ)http://www.businessinsider.com/sp-500-all-time-high-sept-18-2014-9
Thu, 18 Sep 2014 10:50:00 -0400Myles Udland
<p><img src="http://static5.businessinsider.com/image/538ee2a369bedd3578b5dd82-1200-924/chicago-traders-confetti.jpg" border="0" alt="chicago traders confetti"></p><p>The S&amp;P 500 is at a new all-time high.</p>
<p>In morning trade on Thursday, the S&amp;P 500 was trading above 2,011.</p>
<p>The Dow Jones Industrial Average was also at a new all-time high, trading above 17,245.&nbsp;</p>
<p>The new highs in the S&amp;P 500 and Dow come a day after the Federal Reserve announced its latest monetary policy decision, keeping interest rates low and taking another $10 billion off its QE program.</p>
<p>In her press conference following the announcement, Fed Chair Janet Yellen declined to give any color on when the Fed might begin raising interest rates, though the Fed kept the language "considerable time" to describe how long might elapse between the end of QE and the first rate hike.</p>
<p>On Thursday morning, we also got a few pieces of conflicting economic data, with <a href="http://www.businessinsider.com/initial-jobless-claims-sept-18-2014-9">initial jobless claims falling</a> to a 14-year low at 280,000, while <a href="http://www.businessinsider.com/housing-starts-aug-2014-2014-9">housing starts widely</a> missed expectations.</p>
<p>Housing starts fell 14.4% on an annualized basis, the biggest drop since April and larger than the 5.2% decline that was expected.&nbsp;</p>
<p>The latest <a href="http://www.businessinsider.com/philly-fed-business-report-september-18-2014-9">manufacturing report from the Philadelphia Federal Reserve</a> showed that the diffusion index fell to 22.5 from 28.0, also missing expectations for 23.0. The report's employment subindex, however, rose to its best level since May 2011.&nbsp;</p>
<p>In stock news, <a href="http://www.businessinsider.com/rite-aid-shares-fall-after-guidance-cut-2014-9">pharmacy chain Rite Aid</a> was one of the biggest losers on Thursday, falling more than 12% after cutting its fiscal-year earnings and sales outlook.&nbsp;</p>
<p>Shares of <a href="http://www.businessinsider.com/vivus-shares-surge-after-drug-approval-2014-9">pharmaceutical company VIVUS were up</a> more than 14% after the company received approval for a new drug to treat erectile dysfunction.&nbsp;</p>
<p><em>More to come ..</em>.</p><p><a href="http://www.businessinsider.com/sp-500-all-time-high-sept-18-2014-9#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/treasury-no-drama-in-its-press-room-2014-6Treasury Department Insists There's No Drama In Its Press Room http://www.businessinsider.com/treasury-no-drama-in-its-press-room-2014-6
Mon, 09 Jun 2014 18:30:57 -0400Colin Campbell
<p><img style="float:right;" src="http://static2.businessinsider.com/image/53962dd7eab8ea6f31f447eb-480-/treasurydepartement.jpg" border="0" alt="Treasury_departement" width="480" /></p><p>The country's big wire services aren't going to be a full-time presence in the U.S. Treasury's press room. However, a source in Treasury and spokespeople for multiple media outlets told Business Insider the change has nothing to do with rumors of reporters being upset with the agency's treatment of the press.</p>
<p>In a move that was reportedly rolled out last week, four wire services &mdash; Associated Press, Reuters, Dow Jones, and Bloomberg &mdash; "are giving up" manning the room, according to <a href="http://jimromenesko.com/2014/06/09/wire-services-abandon-treasury-press-room/">a Monday post</a> on Jim Romenesko's media blog. The room will remain open and accessible to equipment, the report said.</p>
<p>One of Romenesko's sources described the move as a response to the Treasury's unproductive relationship with media outlets.</p>
<p>"They complain there&rsquo;s no news and no access, so they&rsquo;re taking their ball and going home," the source said of the wire services.</p>
<p>However, a source in the Treasury department and several media reps downplayed the significance of the change to Business Insider. Instead, they stressed the declining need to constantly have on-the-scene Treasury reporters in the age of electronic communication.</p>
<p>"'Abandon,' in the post you cite, is inaccurate," Paul Colford, the AP's director of media relations, wrote in an email.</p>
<p>"This is purely a technical move," Colford continued. "We are keeping our equipment at Treasury and, of course, we continue to report on the department. We will get vital information just as fast and we will still report on major events from our workstation inside the Treasury press room. However, we are confident that we don&rsquo;t need to be rooted to a desk in the Treasury press room all day, every day."</p>
<p>A spokesperson for Dow Jones had a similar take.&nbsp;</p>
<p>"In an effort to improve coverage of the Treasury Department, Dow Jones is working with other news organizations as well as the department itself, to modernize communication and dissemination of information. Dow Jones will continue to maintain desks and equipment to report news from The Treasury Department," Colleen Schwartz, Dow Jones' director of corporate communications, echoed.</p>
<p>A Treasury source emphasized the reporters would still have "work space" in the press room.&nbsp;</p>
<p>"We discussed our commitment to continuing to provide as much information by email as possible. At the same time, there was broad agreement among the wires that maintaining their work space in the press room was something they found valuable and planned to continue," said the source.</p><p><a href="http://www.businessinsider.com/treasury-no-drama-in-its-press-room-2014-6#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/dow-jones-industrial-avg-no-change-days-2014-4Yesterday's 0.00-Point Move In The Dow Was Really Weird (DIA)http://www.businessinsider.com/dow-jones-industrial-avg-no-change-days-2014-4
Fri, 25 Apr 2014 12:00:00 -0400Andy Kiersz
<p>The Dow Jones Industrial Average closed on Thursday absolutely <a href="http://www.businessinsider.com/closing-bell-april-24-2014-2014-4">unchanged for the day</a>. The closing index value on Wednesday was 16,501.65, and the closing value on Thursday was also 16,501.65.</p>
<p>This seems very weird. One would expect at least a little change in the markets. So, we were curious to see how weird it was.</p>
<p>Using data from the St. Louis Fed, we looked at the Dow's daily closing prices on every trading day since May 26, 1896, the first day the Dow was calculated. And we found 197 other days when the markets were open and the day-over-day change was recorded as a 0.00.</p>
<p>Given that we are looking at 32,138 trading days worth of data, 198 of which (including yesterday) had no change, at a glance, an estimate of the probability of getting a day with zero change is 198 &divide;&nbsp;32,138, or about 0.6%.</p>
<p>A day with a total day over day change of 0.00 hasn't happened in a while &mdash; the last such day was Monday, December 24, 2001, when the DJIA closed at 10,035.34, the same as the previous trading day of Friday, December 21, 2001.</p>
<p>It's worth noting that the NYSE switched over to trading stocks with decimal prices, rather than prices denominated in fractions of a dollar. This may have some effect on why days with no change have become very rare since.</p>
<p>This drought of no change days is historically weirder than having a day with no change. We made a chart showing all of the days on which the DJIA closed at the same value, to two decimal places, as it had closed the day before. The horizontal blue lines show those days. Note the big band of white in recent years, as opposed to getting a zero change day at least occasionally before then:</p>
<p><img src="http://static4.businessinsider.com/image/535a7f4e69bedd6f75505e1a-782-1898/djia days with no change final.png" border="0" alt="DJIA days with no change final" width="782" height="1898" /></p>
<p><br />&nbsp;</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/states-where-walmart-and-whole-foods-are-dominant-2014-4" >Here's The Difference Between Wal-Mart America And Whole Foods America</a></strong></p>
<p><a href="http://www.businessinsider.com/dow-jones-industrial-avg-no-change-days-2014-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/apple-in-the-dow-2014-4Here's How To Think About Apple's Stock Splithttp://www.businessinsider.com/apple-in-the-dow-2014-4
Thu, 24 Apr 2014 12:06:00 -0400Vahan Janjigian
<p><img style="float:right;" src="http://static1.businessinsider.com/image/522f4bd96bb3f7ca7843acab-799-599/dow-jones-1.jpg" border="0" alt="dow jones" /></p><p>Just weeks after Google (GOOG) split its shares, Apple (APPL) announced a stock split of its own. Apple is splitting its shares seven-for-one, which will bring the stock price down to somewhere around $80 per share.</p>
<p>From an economic perspective, a stock split is meaningless. It&rsquo;s a bit like a baker who slices a pie. Slicing the pie creates more pieces and it even makes it easier to eat, but at the end of the day, it&rsquo;s still just one pie. The same is true for a stock split. There are more shares after the split, but the market capitalization (i.e., the sum of the value of the shares) doesn&rsquo;t change. So why split the stock?</p>
<p>One often heard argument is that a stock split does increase the market cap because it makes the stock more marketable. In other words, investors are more willing to buy an $80 stock than than a $560 stock. If this is indeed true, then demand for the shares increases and they will appreciate at a higher rate than they would have if there had been no split.</p>
<p>However, this argument is largely fallacious and there is little empirical evidence supporting it. At the very most, a stock split might signal management&rsquo;s optimism about the company&rsquo;s future prospects. After all, management probably wouldn&rsquo;t split the shares if they thought the business was about to hit a rough patch and the stock price was about to fall. But if a split sends a signal, it probably won&rsquo;t cause much more than a temporary rise in the stock price. Besides, there are other and more effective ways for management to signal its optimism. It could just say so in a press release or conference call. Or, it could increase the dividend or buyback shares. (Apple is doing these things, too).</p>
<p>I heard one reporter on the radio argue that Apple&rsquo;s stock split means that ordinary investors will finally be able to afford the stock. He said that at the current price, a 100 shares of stock costs a fortune; but after the split, more people will be able to buy 100 shares. This is a ridiculous argument. The last time I checked, there was no law that said you had to buy 100 shares at a time. Many years ago, investors did pay a bit of a penalty if they bought anything other than round lots (i.e., 100 share increments). Today, thanks to internet brokers, in most cases, it costs less than $10 no matter how many shares you buy. So, yes, the commission per share is higher if you buy fewer shares, but it&rsquo;s still very low.</p>
<p>In one regard, however, Apple&rsquo;s stock split does make sense. By splitting the stock and bringing the price down to a more common level, Apple becomes eligible for membership in the prestigious Dow Jones Industrial Average. Unlike most other indexes, the Dow is price weighted. This means that higher priced stocks carry more weight in the index. The Dow committee is not likely to add a $500 stock to the index. Now that Apple is splitting the shares, don&rsquo;t be surprised if it becomes a member of the Dow index.</p><p><a href="http://www.businessinsider.com/apple-in-the-dow-2014-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/the-djias-22000-point-mistake-2014-3THE 22,000 POINT MISTAKE: How The Dow Jones Could Be Almost Three Times Higher Than It Is Today (DJI, DIA)http://www.businessinsider.com/the-djias-22000-point-mistake-2014-3
Tue, 04 Mar 2014 17:22:00 -0500Bryan Taylor
<p><img style="float:right;" src="http://static3.businessinsider.com/image/531651f56bb3f75b4b873698-480-/ibm-20.jpg" border="0" alt="IBM" width="480" /></p><p>One of the long-term components of the Dow Jones Industrial Average has been IBM.</p>
<p>The company was originally added to the Dow Jones Industrials on March 26, 1932 in a reshuffle involving eight stocks including Coca-Cola, Nash Motors (later American Motors) and Proctor &amp; Gamble. On March 13, 1939, however, both IBM and Nash Motors were removed from the average and replaced by American Telephone &amp; Telegraph and United Aircraft Corp (now United Technologies).</p>
<p>AT&amp;T was in the Dow Jones Utilities Average until June 1, 1938. Until then, the Dow committee had interpreted utilities in a broader sense to include electric, gas, and communications companies as providers of essential services. In 1938, the Dow Jones committee decided to restrict membership in the Utilities Average to power utilities.</p>
<p>The resulting reshuffle removed nine stocks, including AT&amp;T, International Telephone &amp; Telegraph, and Western Union, all of which were communications utilities rather than power utilities, from the Dow Jones Utilities Average.</p>
<p>Since AT&amp;T was such a huge company, it was moved over to the Dow Jones Industrial Average, which required that another stock be removed to make room for AT&amp;T.</p>
<p>Thus, IBM was kicked out of the Dow Jones Industrial Average.</p>
<p>What if the Dow Jones committee had not redefined the Utilities Average to only include power utilities? What if IBM had stayed in the Dow Jones Industrial Average between March 13, 1939, when it was removed, and June 29, 1979, when IBM replaced Chrysler in the Dow Jones Industrials?</p>
<p>Obviously, the Dow Jones Industrials would be higher than it is today, but how much higher?</p>
<p>International Business Machines incorporated on June 16, 1911 as The Computer-Tabulating-Recording Co., a merger of The Computing Scale Company of America, The Tabulating Machine Company and The International Time Recording Company of New York. The company listed on the NYSE in November 1915, and on February 14, 1924, the company acquired International Business Machines and changed its name in a reverse acquisition.</p>
<p>IBM has been one of the best performers on the stock exchange in history.</p>
<p>If you had invested $1 in IBM when it started trading OTC in August 1911, it would have grown to $40,000 today on a price basis. If you had reinvested your dividends, your $1 investment would have grown to $1,434,300. In the past 100 years, IBM has given over a million-fold return.</p>
<p>The graph below shows the performance of IBM stock over the past 100 years.</p>
<p><img style="float:right;" src="http://static1.businessinsider.com/image/53164e8c6bb3f7c53e873696-624-289/chart-1-10.jpg" border="0" alt="Chart 1" width="480" /></p>
<p>AT&amp;T incorporated in New York on March 3, 1885 and began trading on the NYSE in May 1900 after it had acquired American Bell Telephone Co. in March 1900. The company was forced to split up into &ldquo;Ma Bell&rdquo; and the &ldquo;Baby Bells&rdquo; by the U.S. government on December 31, 1983.</p>
<p>On November 18, 2005, AT&amp;T Corp. (&ldquo;Ma Bell&rdquo;) was acquired by one of the Baby Bells, SBC Communications, which then changed its name to AT&amp;T Inc. in a reverse acquisition.</p>
<p><span style="line-height: 1.5em;">AT&amp;T has not performed as well as IBM over the past 100 years.</span></p>
<p><span style="line-height: 1.5em;">If you had invested $1 in AT&amp;T in May 1900, your investment would have grown to only $4.26 on a price basis, or $639 if you had reinvested all of your dividends back in the company, by the time AT&amp;T was broken up in February 1984.</span></p>
<p><img style="float:right;" src="http://static6.businessinsider.com/image/53164e8cecad040047873694-624-289/chart-2-6.jpg" border="0" alt="chart 2" width="480" style="color: #000000;" />So what if the Dow Jones Committee had kept IBM in the Dow Jones Average between March 1939 and June 1979 and had never admitted AT&amp;T, keeping it in the Utilities Average? What would the result have been?</p>
<p>IBM closed at 187.25 on March 14, 1939 while AT&amp;T closed at 166.125. IBM closed at 73.375 on June 29, 1979 while AT&amp;T closed at 57.875.</p>
<p>Price wise, the results appear to be similar.</p>
<p><span style="line-height: 1.5em;">The difference is that both stocks split, and the stocks had several rights offerings in the intervening 40 years. The cumulative effect of these stock splits and rights offerings is significant.</span></p>
<p><span style="line-height: 1.5em;">You would have to adjust the stock price of AT&amp;T by 7.15 to allow for the impact of stock splits and rights offerings, but you would have to adjust IBM stock by a factor of 562.48.</span></p>
<p><span style="line-height: 1.5em;">If neither stock had split or provided rights offerings in those intervening forty years, AT&amp;T stock would have been at 414 in June 1979, but IBM would have been at 41,272.</span></p>
<p><span style="line-height: 1.5em;">IBM increased one hundred times more than AT&amp;T during those intervening forty years.</span></p>
<p><span style="line-height: 1.5em;">The DJIA stood at 151.1 on March 14, 1939 and 841.98 on June 29, 1979. Since the DJIA is price weighted, you can remove the impact of AT&amp;T on the DJIA by subtracting out the price of AT&amp;T allowing for the splits, and replacing this amount with the value of IBM stock, allowing for the splits in IBM.</span></p>
<p><span style="line-height: 1.5em;">If you do this, you would find that the DJIA would have been at 23,582 in June 1979, not 841.98. </span></p>
<p><span style="line-height: 1.5em;">In other words, IBM would have added 22,740 points to the DJIA had it never been removed.</span></p>
<p><img style="float:right;" src="http://static1.businessinsider.com/image/53164e8ceab8eae8152808a1-624-289/chart-3-4.jpg" border="0" alt="chart 3" style="color: #000000;" /><span style="line-height: 1.5em;">The DJIA is currently trading above 16,000.</span></p>
<p><span style="line-height: 1.5em;">If you add 22,740 points to this value, you would arrive at a DJIA close to 39,000.</span></p>
<p><span style="line-height: 1.5em;">If IBM had stayed in the DJIA, CNBC and&nbsp;</span><em style="line-height: 1.5em;">The Wall Street Journal</em><span style="line-height: 1.5em;">&nbsp;would be preparing for the DJIA&rsquo;s approaching rendezvous with 40,000.</span></p>
<p><span style="line-height: 1.5em;">However, since the Dow Jones Committee removed IBM from the Dow Jones Industrial Average in 1939 and kept it out for forty years, we will have to wait several more decades to reach that goal.</span></p><p><a href="http://www.businessinsider.com/the-djias-22000-point-mistake-2014-3#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/dow-jones-ceo-fenwick-out-2014-1Dow Jones CEO Fenwick Is Out, Parent Company News Corp Said It's Reviewing The Strategyhttp://www.businessinsider.com/dow-jones-ceo-fenwick-out-2014-1
Tue, 21 Jan 2014 18:54:47 -0500Jennifer Saba
<p><img style="float:right;" src="http://static5.businessinsider.com/image/52df079a6da8116762a09e41-480-/lex-fenwick.jpg" border="0" alt="lex fenwick" width="480" /></p><p>(Reuters) - News Corp said that Dow Jones Chief Executive Lex Fenwick is leaving News Corp and will be replaced by William Lewis as interim CEO.</p>
<p>&nbsp;In a statement on Tuesday, News Corp said it had plans to review the strategy for Dow Jones, the publisher of the Wall Street Journal and operator of Dow Jones Newswires.</p>
<p>"We're reviewing the institutional strategy of Dow Jones with an eye towards changes that will deliver even more value to its customers," News Corp Chief Executive Robert Thomson said.</p>
<p>Fenwick was appointed CEO of Dow Jones in February 2012 after more than two decades at Bloomberg L.P.</p>
<p>Fenwick was a controversial leader, known for his hard-charging style and profane outbursts, who was tasked with overhauling Dow Jones' institutional business.</p>
<p>Last year, Dow Jones launched DJX, essentially pulling all of Dow Jones products like Factiva and Newswires in one product for one price. It was a risky move: customers like banks, hedge funds and retail brokers were used to cherry picking from Dow Jones' offerings and negotiating on price.</p>
<p>During News Corp's past earnings reports, the company had flagged weakness at Dow Jones' institutional division.</p>
<p>Lewis previously served as editor-in-chief of the Telegraph Media Group in Britain.</p>
<p>Thomson Reuters competes with Dow Jones in providing news and financial data to banks and other financial institutions.</p>
<p>(Reporting by Jennifer Saba in New York; Editing by Andre Grenon and Nick Zieminski)</p><p><a href="http://www.businessinsider.com/dow-jones-ceo-fenwick-out-2014-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/american-express-visa-adding-dow-2014-1Two Stocks Are Behind The Entire Rally In The Dow (V, AXP)http://www.businessinsider.com/american-express-visa-adding-dow-2014-1
Fri, 17 Jan 2014 12:33:00 -0500Steven Perlberg
<p><span style="line-height: 1.5em;"><img style="float:right;" src="http://static3.businessinsider.com/image/52d967fb6bb3f72f68769270-480-/gymnast.png" border="0" alt="gymnast" width="480" />As stock indices go, the Dow is weird<span style="line-height: 1.5em;"> and people tend to hate it.</span></span></p>
<p>That's because it's a price-weighted index, so a stock with a high per-share price will move the index around more. In fact, a<span style="line-height: 1.5em;">&nbsp;one-point move in any single Dow stock&nbsp;</span><a href="http://wsj.com/mdc/public/page/2_3022-djiahourly.html">moves the whole index by 6.4219 points</a><span style="line-height: 1.5em;">.</span></p>
<p><span>Right now, the Dow is up about 60 points (0.4%). And that's entirely due to two credit card companies, Visa and American Express.</span></p>
<p>American Express is ripping just under 5% today <a href="http://www.fool.com/investing/general/2014/01/17/american-express-roars-after-earnings.aspx">after posting solid earnings</a>, accounting for 26.5 points of the Dow's rise.</p>
<p><span>Visa is only up 2%, but it's adding 30 points to the Dow.<br /><br />Together, Visa and American Express are responsible for 94% of the entire index's rise.</span></p>
<p><span>Again, the Dow is weird and people tend to hate it.</span></p>
<p><span>Meanwhile, the S&amp;P 500 is basically flat today. Go figure.</span></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/albert-edwards-cliff-of-deflation-2014-1" >ALBERT EDWARDS: We're On The Cliff Of Deflation And Markets Don't Seem To Care</a></strong></p>
<p><a href="http://www.businessinsider.com/american-express-visa-adding-dow-2014-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/dow-jones-suing-ransquawk-2014-1Dow Jones Is Suing A Trader News Service Under A Surprising 1918 Supreme Court Rulinghttp://www.businessinsider.com/dow-jones-suing-ransquawk-2014-1
Fri, 10 Jan 2014 12:51:00 -0500Steven Perlberg
<p><span style="line-height: 1.5em;"><span><img style="float:right;" src="http://static3.businessinsider.com/image/52d015c66bb3f79d491354a4-480-/soldiers-newspaper.png" border="0" alt="soldiers newspaper" width="480" />Every millisecond matters i</span>n the modern trading paradigm, with market news consumers hungrier than ever for fast and reliable information.</span></p>
<p><span style="line-height: 1.5em;">It's why a terminal from Bloomberg &mdash; whose reporters are <a href="http://www.businessinsider.com/bloomberg-reporters-compensation-2013-12">financially incentivized to break market-moving news</a> &mdash; costs over $20,000. Or why Reuters let elite traders pay to <a href="http://www.businessinsider.com/latency-in-trading-2013-6">receive data two seconds early</a>. Two seconds is everything!</span></p>
<p><span style="line-height: 1.5em;">Now Dow Jones, the wire service that owns The Wall Street Journal, has <a href="http://dowjones.com/collateral/files/RansquawkSummonsandComplaint.pdf">filed a lawsuit</a> against RANsquawk, a British "squawk" service that provides traders with breaking news.</span></p>
<p>DJ argues that RANsquawk essentially lifts their headlines within seconds. Interestingly, as <a href="http://gigaom.com/2014/01/09/nice-try-dow-jones-but-your-hot-news-case-is-doomed-the-news-is-everywhere-now/">GigaOM's Mathew Ingram notes</a>, DJ isn't suing RANsquawk for copyright infringement. They're suing them under an <a href="http://en.wikipedia.org/wiki/International_News_Service_v._Associated_Press">arcane 1918 Supreme Court</a> ruling regarding "hot news" &mdash; which, as Ingram writes, is "<span style="line-height: 1.5em;">the kind whose value rapidly diminishes over time."</span></p>
<p><span style="line-height: 1.5em;">Well, the value of&nbsp;<em>market</em> news rapidly diminishes over time, for fairly obvious reasons. What "edge" do you have once everyone knows the information on which you are trading?</span></p>
<p><span style="line-height: 1.5em;"><span>So it's no surprise that financial wire news services are particularly touchy about the aggregation of their content. Maybe that touchiness is&nbsp;</span><span>pass&eacute; by 2014 standards, as the twitterfication of news "game-changes" the industry in real time.&nbsp;</span><span>People&nbsp;</span><a href="http://gigaom.com/2012/03/19/if-you-have-news-it-will-be-aggregated-andor-curated/">don't know where their news is coming from</a><span>. They just want it.</span></span></p>
<p><span style="line-height: 1.5em;">Ingram argues DJ's case is more or less futile. Breaking news is already broken, he writes. <a href="http://gigaom.com/2014/01/09/nice-try-dow-jones-but-your-hot-news-case-is-doomed-the-news-is-everywhere-now/">From GigaOM</a>:</span></p>
<p style="padding-left: 30px;">The reality, as I&rsquo;ve argued before, is that&nbsp;<a href="http://gigaom.com/2011/11/16/memo-to-ap-twitter-is-the-newswire-now/">Twitter&nbsp;<em>is</em>&nbsp;the news-wire</a>&nbsp;for a growing number of people now, and the life-span of a so-called news &ldquo;scoop&rdquo; continues to&nbsp;<a href="http://gigaom.com/2012/02/13/twitter-and-the-incredible-shrinking-news-cycle/">dwindle rapidly</a>. Dow Jones may not want to believe it, but there are plenty of legal ways that Ransquawk &mdash; or anyone else, for that matter &mdash; can find out market-moving information within seconds or minutes of Dow Jones moving it on the wire. Suing every provider like Ransquawk is like closing the barn door after the horse has long since moved on to greener pastures.</p>
<p>"We will continue to aggressively pursue the news and produce a world-class product, as we&rsquo;ve done for nearly 125 years," <a href="http://new.dowjones.com/press-room/protecting-journalists-work/">said DJ's Jason Conti</a>. "And when others improperly try to take that product, we&rsquo;ll aggressively pursue them, too."</p><p><a href="http://www.businessinsider.com/dow-jones-suing-ransquawk-2014-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/goldman-ibm-slamming-the-dow-2013-102 Collapsing Stocks Have Whacked 100 Points Off The Dow (DIA, GS, IBM)http://www.businessinsider.com/goldman-ibm-slamming-the-dow-2013-10
Thu, 17 Oct 2013 07:56:00 -0400Sam Ro
<p><img style="float:right;" src="http://static2.businessinsider.com/image/525fcff569bedd0d61aaec45-480-/ice-girl-chainsaw-2.jpg" border="0" alt="ice girl chainsaw" width="480" /></p><p>The Dow Jones Industrial Average is a peculiar stock market index for several reasons.</p>
<p>For one, it's a price-weighted index, which means a stock with a high per-share price will have a greater influence on the index's fluctuations. And currently, a one-point move in any single Dow stock <a href="http://wsj.com/mdc/public/page/2_3022-djiahourly.html">moves the Dow by 6.4219 points</a>.</p>
<p>As of yesterday's market close, the three highest-priced stocks in the Dow were Visa ($195), IBM ($186), and Goldman Sachs ($162).</p>
<p>Early in trading, IBM and Goldman Sachs are each down sharply in the wake of their earnings announcements.</p>
<p><a href="http://www.businessinsider.com/ibm-earnings-2013-10">IBM is down $13.45</a>, which hacks 86 points from the Dow.</p>
<p><a href="http://www.businessinsider.com/goldman-third-quarter-earnings-results-2013-10">Goldman is down $4.09</a>, which shaves 26 points from the Dow.</p>
<p>So, two stocks are responsible for a 112-point decline in the Dow.</p>
<p>Now you see why people hate the Dow.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/dow-price-move-distortions-2013-9" >People Are Already Pointing Out Problems With The New Additions To The Dow</a></strong></p>
<p><a href="http://www.businessinsider.com/goldman-ibm-slamming-the-dow-2013-10#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/dow-theory-expert-im-not-buying-this-buy-signal-2013-9RICHARD RUSSELL: Here Are 2 Reasons Why I'm Not Buying The Latest 'Dow Theory' Buy-Signalhttp://www.businessinsider.com/dow-theory-expert-im-not-buying-this-buy-signal-2013-9
Tue, 24 Sep 2013 11:45:00 -0400Rob Wile
<p>One of the oldest stock market phenomena that chart-watchers follow are the Dow Theory buy and sell signals.</p>
<p>The Dow Theory dictates that if the Dow Jones Industrial Average and Dow Jones Transportation Average are hitting highs (or lows) within a reasonably short time-window, it's time to buy (or sell).</p>
<p>Last week, the buy-signal was technically confirmed.</p>
<p>But Dow Theory expert Richard Russell remains unconvinced that it's really time to jump into (or jump deeper into) the market.</p>
<p><a href="http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/9/24_Richard_Russell_-_US_Ponzi_Collapse_%26_A_New_Monetary_System.html">Writing on King World News</a>, he says two other trends are giving him pause.</p>
<p>First, the NYSE advance-decline line is, "<span>running into resistance at a triple-top," which he shows by the blue line in the following graph:</span></p>
<p><span><img src="http://static5.businessinsider.com/image/5241aae669bedd757bab8328-502-547/kwn russell iv 9-23.jpg" border="0" alt="KWN Russell IV 9 23" /></span></p>
<p><span>Secondly, he doesn't like what he's seeing out of the Dow's Utility Index, the significance of which he explains thusly:</span></p>
<p style="padding-left: 30px;"><span><span>"This average appeared in 1929, so it was never incorporated into classic Dow Theory.&nbsp; </span></span></p>
<p style="padding-left: 30px;"><span><span>"Nevertheless, the Utility Average has a history of topping out three months ahead of the rest of the market.&nbsp; Although, on occasion the Utilities have topped out simultaneously with the rest of the market. I show the Utility Average below, and it does indeed appear to have topped out."</span></span></p>
<p><span><span>Here's what he means:</span></span></p>
<p><span><span><img src="http://static4.businessinsider.com/image/5241ab7569bedd1b7eab8321-505-554/kwn russell v 9-23.jpg" border="0" alt="KWN Russell V 9 23" /></span></span></p>
<p><span><span>Russell admits the buy signal could still very well be real given that markets are seemingly beholden to the Fed's influence.</span></span></p>
<p><span><span>But those two items have left him in wait-and-see mode: "<span>I'm not going to go into the &ldquo;why's&rdquo; or &ldquo;how comes&rdquo; of the Fed's decision, let's just watch the market and see how it acts," he says.</span></span></span></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/ray-dalio-economic-presentation-2013-9" >Ray Dalio Explains How The Economy Works</a></strong></p>
<p><a href="http://www.businessinsider.com/dow-theory-expert-im-not-buying-this-buy-signal-2013-9#comments">Join the conversation about this story &#187;</a></p>